By that logic piracy cannot cause damages above the retail value of a single copy regardless of how many times it was downloaded because ultimately they only stole 1 game.

Yeah...

The problem is you think the logic is wrong and not the punishment for illegal downloading should be at absolute most, the cost of a personal copy. Even if you made the download 100 times for reinstalls.

Which honestly, is how it works...

The thing is people that don't seed are assholes, and for every person you seed to, you just distributed it to them. And if/when that can be quantified, that's when huge charges rack up.

Like there was a porn company that seeded their own videos, logged IPs, and anyone they could identify was sued for distributing to every other person, regardless of if they could be identified. I think that shook out with greatly diminished charges, but I can't remember

As far as how to fix that,change the laws so instead of user, it's percent of data. 100% seed ratio would mean you took a copy, and provided a copy. Which would make most piracy not worth the effort of rights holders to enforce. Although Felony theft limits can be as low as $200 in some states and under 1,000 but that being so low due to inflation is a totally different problem.